Skip to main content

tv   Fast Money Halftime Report  CNBC  October 1, 2012 12:00pm-1:00pm EDT

12:00 pm
welcome back to "squawk on the street." take a look at berkshire hathaway. he thinks we are 24% below the intrinsic value. >> that does it for us here. as we hit noon let's get to the fast money halftime live at the value investing congress in new york city. good afternoon. welcome to a special addition of halftime. we're live at the value investing con dwres in the heart of new york city where the biggest and best known managers are presenting their top investment ideas. we'll be speaking live with the house and that's moments after he reveals thinks tom picks and the fed chairman is speaking today before the economic club of indiana and you will see the question and answer session live later on in the hour. first, let's turn our focus on the market and stocks higher to
12:01 pm
start the fourth quarter and after a better than expected manufacturing report where does the rally go from here? we're getting your fourth quarter play back from pete and steve here with me and stephanie link and steve grasso and i will start with you. given what happened last week in the market, did you guys come in today a little skeptical about this move in the market and then we got the ism report and that changed your way of thinking? >> i think you always come in skeptical because you wonder how much is window dressing and how much is the market itself creating and when you look at it, i think there are great opportunities going toward the fourth quarter. i am looking at certain areas i want to remine offensive and remain opportunistic and i am looking at certain names i know you like as well and i still think apple is under valued and goes higher. that's one of the names i would point out. if our on the defensive side i am looking at the big pharma names where you are looking at the valuation and the yield as well as the big money center banks and i would also stick with something like a kkr, black stone, and a lot of students
12:02 pm
depending how aggressive or offensive or defensive you want to be. >> the market came back up a percent or so last week. did you come in today a bit of a doubter and how did the ism report better than expected change your way of thinking if at all. >> you're right. i came in somewhat skeptical today. i was still bullish. i am still skeptical. the futures looked up and then when the ism hit of course they moved up higher and all because they said our bank problems are not as bad as feared. this is clear heyly a market that the mark and until the news hits you square in the face to keep going higher, i think that may come, though, with the third quarter earnings release and i think when you see the worst quarter in a long time and i don't think it is as well discounted. >> you think maybe the trough in the third quarter and then we start to push back higher? >> no. i think it is a market sells off
12:03 pm
meaningfully that will be the froth in the market and i am not looking for a major correction which is why i am bullishly commissioned. >> grasso on the floor of the new york stock exchange, and the line in the sand, 1450 where we're hanging out and how do you see things from the floor? >> you have to look at the recent low and under athe 1430 level and 1425 is pretty much let's call it the line in the sand. the ism number was used. everyone was looking at global manufacturing coming in and when you look at our numbers, they weren't as bad .
12:04 pm
we're watching earning. we're hit with a good dose of economic news this morning. >> the data this morning was positive. i think that the china data was also encouraging. nowhere where we need to be in terms of china and the recovery and i think that manufacturing number overseas was pretty impressive, month to month over increase and i think you're troughing in china, and i do think the new regime coming in november will start to aggressively ease and continue the policies over there. i think we're growing 2, 2 ps 5% gdp. i think it is okay. europe is off crisis mode. china will start to recover. i think you can be bullish. we have been buying the dip and buying the stock that is have gotten hurt. there are plenty of names out there and housing, retail, consumer, auto, a lot to be excited about. >> yeah. the guys next to me were talking
12:05 pm
about bed, bath and beyond a second ago and not just because they like to shop there but for the virtues of what the stock has done and that's what this day is all about and the reason halftime is live from the value investing congress here at the marriott marquise in new york city and all about stock picks. we'll hear from some of the biggest investors in the world and how they're positioned for the fourth quarter and last year there were big winners. it is what makes this the place to be and bill ackman and home security last year and dived einhorn, green mountain, you know what's going on there, that is down 70% and we have already heard from the host of this event. you will hear from him ex inclu exclusively on the show. he is going long and might not be surprised by that because of the position but, guys, they're saying that netflix is a better business than amazon. how about provocative or controversial? >> he fulfilled both of those,
12:06 pm
being provocative and controversy. i don't see it that way. i can understand why he is excited about netflix. you and i talked about this many times. it is all about product and what they can get out there as far as content. they moved themselves on the content when you talk about the streaming into a different direction. going more towards the media of the television market and getting that out there as opposed to paying all of these huge sums of money and getting into a better margin business so it is understandable why a value guy likes the margins getting better and buying the television. >> this is why have you to be at an event like this because you saw the move in netflix this morning autoen though no one is really surprised by the fact that whitney remains long on netflix and the stock moves when a guy like that talks. netflix better than amazon, when i want the best tv at the best pricey go to apple nozone. >> i am going to be really interested to hear why he is saying that. to me netflix has to spend more and more for content where as to
12:07 pm
draw people to the site where as if you're amazon, the content is there on a natural basis. you want a tv, you go there. you want a book, where else you go? i don't buy that. i am not sure any more it is so well shorted but i am not buying that. >> we can also assume that till son is still long j.c. penney which we'll get into when he is here. as you know bill ackman is one of the biggest supporters of ron johnson and j.c. penney and he will be on "squawk box" tomorrow morning. you will hear it straight from mr. ackman and he will give his presentation this evening between 5 or 5:30 or so and david einhorn will be here tomorrow as well. taking a look at the picks from last year, stephanie, einhorn, the big short to borrow a word from a named author but green mountain, stock down 70% since then. pretty good call to say the least. >> a great actual actually.
12:08 pm
actually, it is one of the reasons why we have been buying starbucks because we think it is going to continue to gain more momentum and more product flow independently of the green mountain, so i just don't think you want to touch green mountain here and that's again like i say what we're buying starbucks i think the stock from a risk and reward point of view and what they're doing from a product portfolio point of view makes sense. >> courtney reagan is keeping an eye on all the happenings in the ballroom and has something here from the congress, another mention of a particular stock. courtney, what do you have? >> take a look if we can put up shares of splunk. it is a miami based hedge fund and says that this is a name that is easy to short and you can see shares are taking a dip on this because it is a very competitive position right now squeezed into a niche between quality and price. we'll watch this as we continue to speak. >> courtney, thanks so much.
12:09 pm
you can see the shares picking up a bit of a dip there since recovering and obviously a lot of active movers on a day like this and give me the view on a couple of these thoughts here. perhaps this netflix idea or even david einhorn who i know you follow closely and shorpt of green mountain. >> when you look at einhorn's pick, always seems to me there is a really quick reaction in the marketplace whenever he comes out short on a name and he says shoot first and ask questions later and you saw that happen with green mountain. you flip it around and out performing has been sprint. i am 20% left in my position. i trimmed it out a little bit and now they're back to profitability. seems like a lot of these guys are known for certain things. he is known for the short buys that happen quick zi remind everybody again if you look at a picture of mr. ackman, he will
12:10 pm
give his presentation at 5:00 tonight and i had sure you will hear in realtime what the call is and he also will be on "squawk box" tomorrow morning and 7:40 a.m. eastern, so you certainly won't want to miss that. we do have other special guests today. jm morgan is a believer in the rally at least for the short-term. the chief u.s. tech at this strategist raised his election day target up to 1495. good to see you here >> thank you, scott. >> we talked about what we went through last week and whether we were they press bis of perhaps a big market move lower and yet we come in today and the economic data seems surprise to the upside and the market is in the mix now of a nice mover today. >> i think last week, last couple weeks really could have been attributed to rebalancing. if you look at what under performed in the last couple weeks, it was assets out performed in the third quarter and treasuries out performed in the last two weeks so i think the rebalancing was taking
12:11 pm
place. we're optimistic about october. one, i have still a very strong sense funds are trying to sit this out, not believers, very worried about the macro issues and about election day and fikds clief and you look at valuations. i think they're very supportive when you look at stocks versus credit. >> september had this idea it was one of the worse months for stocks and turns out to be a pretty good month. october is no walk in the park as everybody knows. it is called the jinx month because there have been several either crashes or major pullbacks or corrections in the market, but yet you're optimistic. you think the earnings story will be better told that be some people up expect. >> i do think it will be a tough earnings season. i think companies will be cautious. maybe those who are doing poorly will use this as an excuse to preannounce. i think it is way to early to be calling the peak in earnings.
12:12 pm
>> you better hope october is a good month given the fact you say we're going 1495 by election day and only a few days in november before election day, tom. you better hope this is a good month. >> three days in november or the month of october. i think it should be october. generally when you have a weak second half of september, october is generally pretty strong. >> last october was one of the best octobers we have had on record. i guess you're looking for a repeat of that but here is my question. if you are concerned about the earnings season and you think the earnings cycle will continue through 2017, i believe you said, then it seems to me that you shouldn't have any concerns about the earnings season because you have to have a major bound and back in earnings without the support from europe and china, you see major recovery there. >> i think that's exactly what's happening, steve. in some ways the manufacturing story is flattening and we're seeing that in a lot of evidence
12:13 pm
and you have to look at the u.s. construction market as really improving. remember, companies are generating nearly peak earnings today but how if they go 50% below what is typical lysine and auto sales 10% and durable goods 500 basis points, so it is miraculous actually. >> is it time to get more offensive in the market. >> yes. in fact, i still want to focus on domestic cyclical, meaning direct orange stories and financials and that filters and the consumer discretionary plays and i think if someone had really was thinking about the beta chase, it will not chain aplays, the base materials as well and a lot of the europe penal plays, some ways krurp credit prices is sort of stabilizing. >> the economic pricing, he tho, i think we would all admit is not just by virtue of the manufacturing data that came out of the eurozone and the stronger economy, alleged stronger
12:14 pm
economy. everything is in quotes. >> that's right. to me that is why '09 is an analogy for europe because the financial crisis really plateaued in the u.s. in the spring of '09 and the economic data didn't show improvement until the late '09. >> good to have you as always on the program. let's take a look at the markets as we head to break. have you the dow up 150 points, perhaps offer the best levels and nasdaq way off the highs as well and a rare one at that given what mondays have usually meant to the markets over the last several months. up next, live from the value investing congress, the fourth quarter playbook continues live as i fannish from the heart of new york city. will financialing out shine and which pang stocks should you bet on and how big of a threat is china to u.s. stocks? halftime reports comes back.
12:15 pm
with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
12:16 pm
we know you. we know you have to rise early... and work late, with not enough sleep in between. how you sometimes need to get over to that exit, like, right now. and how things aren't... just about you anymore. introducing the all-new, smart-sensing... honda accord. it starts with you.
12:17 pm
12:18 pm
welcome back to fast money halftime report. let's take a look at shares of goldman sachs trading higher after a note over the weekend thinking that the company could see the shares appreciate almost 25% over a year saying it maintains leadership positions in most of its businesses. we'll watch this off the highs of the day and still worth watching leading financial sectors. back to you. >> courtney, thanks so much. we are watching the financials today. stephanie, what do you think about this call by berens about goldman sachs and to that matter with what does it mean to the other financials that would benefit? >> we're bullish on the financials. we have been for a while. after the recent qe3 we were buying more. goldman sachs is trading.94 times book value, historically much higher than that, and i think you should probably pick up morgan stanley, j.p. morgan
12:19 pm
and a whole host and what i will point to, aig, trading up.6 times and now that the government over hang is largely removed you still have about 16% exposure but a big bulk gone and i think you can focus on fundamentals and that's what i would point to. >> steve grasso, one of the things that barons mentions, the prospects of improving capital markets, is that something that lifts all financial boats if you will and if that in fact does happen and who else would you look at here? >> j.p. morgan is dead on real early when we thought it was going to crack the $30 level to the downside and with the london wail and at this point i don't know if goldman sachs coming back into being the favorite play. i like the article. i like what it has to say. technically it has had a problem with that 120 area and the 125 area and i would rather see they're looking for this dramatic of a capital appreciation, i would rather let
12:20 pm
it prove itself in the low 120s before i jump back onto goldman sachs. >> just give me a quick comment on the financials. i know you have been talking more on the regional side of things, not necessarily the biggest banks out there. where are you today? >> i still think it has to go with a name like wells fargo because you're so tied to the housing market. not that it is a small bank but smaller than the names we bring up frequently. i still think j.p. morgan works and ready to break out. goldman sachs, you're totally separating it out from the rest of the banks right now. morgan stanley is the kwauzry they investment bangor retail broker or what are they? they're still searching. i think if you look for all the different names i think wells fargo has the upside and will break out of the range it has been pushing. >> the worry in europe is shaking up the market. is china actually the bigger threat in even the greek stock market is out performing the shanghai composite this year. will china be ai believe to
12:21 pm
avert a slowdown in q4. let's bring in the global head of equity strategy michael hurt live on the fast line and joins from us hong kong. welcome to the show. good to have you on halftime. >> thanks very much. good to be with you, scott. >> where does china sit today. >> caller: china sits probably at the very bottom of its business cycle. it clearly has been part of a trifecta much global concerns for equity markets, europe probably being number one, and on going questions about the durability of the u.s. recovery and china and the structural slowdown that many investors see there probably tied for three. we think it is looking up from here. >> the bottom is now in. when will we see a rebound? >> it is very likely that as we begin to see the september data which will come out in about ten days time and then certainly as we progress to the october and november monthly data you're going to begin to see a note
12:22 pm
worthy step higher in some of the key releases that we watch like industrial production, fixed asset investment, bank lending, and of course the pm iseries that we now watch closely. >> i would like to bring one of our traders into the conversation who likely is on the other end of your trade if you will today. steve. >> i am curious as to why you see the improving? what are the data points? you take a look at nike's futures orders and they are looking better than their guidance everywhere except china was down an unbelievable 6% versds forecast being up 1.7% and the aside from today's data that came out the pmi number was still showing traction in the economy, everything coming out of china is weak. what is the impetus that you believe that number will look better other than just because? >> first of all, there are some data that are not necessarily the most headlined figures that are pointing in the right direction.
12:23 pm
if you look at developers land purchases which of course is pointing towards future property construction, that came up substantially in august. it was up 66% year-over-year. new housing starts have begun to improve up 14% year-over-year, and of course properties sold by the developers has also come up year-over-year. there is a figure for planned investment activity and the total numerical value of investments planned for august also rose to 33% year-over-year for 25% in july. these are all forward looking indicators rather than relying on coincident indicators like industrial production and of course financial markets are not going to wait for after the fact confirmation and some of those slower data series. they're going to focus more on the forward-looking indicators. even within the pmi that came out over night, of course, the new orders data did improve substantially and the headline figure although you're right just below the 50.0 break even,
12:24 pm
was higher than the month before and that's the first time in four months that we have seen that improvement. >> what i hear you saying is your outlook is based on real growth and not so much stimulus. if that's the case what areas of the market would you invest in to take advantage of that. >> i do need to be clear. this is going to be a stimulus driven recovery. i would argue stimulus is a proper role of government in any economy that is suffering a business cycle downturn. it is just as true in the united states when the fed acts forcefully to prevent further down tourn in aggregate demand. in china you had an interest rate cut in both june and july earlier this year and even in china where you have a command economy it takes a bit longer for monetary accommodation to show up in the real sector data, so we think that by the october numbers you will start to see a real pickup based on that stimulus both monetary and conviction that were announced
12:25 pm
over the summer. that being the case, to get to your question, i would say there are direct plays in the investment part of china's gdp, whether that is the rail way construction names, for example, or the cement players like cnbm and looking at the third tactical fix in china, we would focus outside of the investment part of the economy for example in consumption names like buy do or bell which is a retailer and then of course you can't ignore the financials. the major warrant on the chinese growth outlook itself. we continue to highlight icbc, the mega capped chinese state-owned bank. >> great to have your insight. thanks so much for joining us. up next on halftime, can facebook recover from its ipo face prant? we have details on the big call on the stock and hear what the
12:26 pm
coo sheryl sandberg told cnbc exclusively and the top value investing picks. we'll be right back from the value investing congress in new york city. want to try to crack it? yeah, that's the way to do it! now we need a little bit more... a little bit more vanilla? this is great! [ male announcer ] at humana, we believe there's never been a better time to share your passions... because the results... are you having fun doing this? yeah. that's a very nice cake! [ male announcer ] well, you can't beat them. [ giggles ] ohh! you got something huh? whoa... [ male announcer ] humana understands the value of spending time together that's a lot of work getting that one in! let's go see the birdies. [ male announcer ] one on one, sharing what you know. let's do it grandpa.
12:27 pm
that's why humana agents will sit down with you, to listen and understand what's important to you. it's how we help you choose the right humana medicare plan for you. because when your medicare is taken care of, you can spend more time sharing your passions. wow. [ giggles ] [ male announcer ] with the people who matter most. i love you grandpa! i love you grandma! now you're a real fisherman. [ male announcer ] humana. [ male announcer ] at scottrade,
12:28 pm
you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying... i'm with scottrade.
12:29 pm
welcome back to halftime live today from the value investing congress in the heart of new york city. it is the first trading day of the fourth quarter and a pretty good one at that. take a look at the major averages and see where we sit on wall street, the dow industrial with a gain of 153.5 points and s&p up nicely as is nasdaq today as well. financials energy and industrials all leading the way. a good kick off to the fourth quarter. >> you have to like the way we're kicking off now. you look at the volatility index that remained under the 16 level and financials led right out of the gate, strong in the premarket and continue to be strong and you look at the industrial space and the pharmaceutical and overall it is a nice broad market rally as people are jumping into the fourth quarter. >> bank of america is up 3% or so today and certainly had great
12:30 pm
performance out of the dow industrial and give me a comment on the market right now. >> bank of america, i own it, i like it. i will have to use my wallet or a phone book because i am feeling really short they're. i think it trends higher. >> we have breaking news regarding the federal reserve steve liesman has the fed chairman to make comments today. >> the fed chairman is speaking to the economic club of indianapolis today and he really what he is doing is taking his case for the new qe to the public. thises something he has done from time to time and it comes sks as you know with a lot of controversy surrounding the new fed policy and with the chairman and the fed policy in the political cross hairs and what he is saying is he expects the new qe to put further downward pressure on rates and increases five issues surrounding this policy saying he expects inflation to remain in check. he hopes the new guidance the
12:31 pm
fed has, in other words, it will remain easy even while the recovery is on going, and says it will promote investment hiring and spending by giving businesses and the public of what confidence of what policy will be in the future and urging congress and the administration to put the budget on a sustainable path and reform the tax code and the education bank and the fed policy is not a panacea. takes on the criticism of the federal reserve and saying it is not doing so because that is temporary and the fed will eventually sell the assets at the appropriate time. also noting as he has in the past that increased bank reserves don't necessarily translate into more money and saying the fed has the power to do that at the appropriate time to prevent inflation. just a few more things, this issue of savers, a lot of people talked about how savers have a disadvantage to low interest rates to fed policy.
12:32 pm
savers have a lot of different interests out there. some have pension plans and they also own homes. the best way to address the concerns is through a stronger economic noting without a job you can't save for retirement or buy the home and it is the best way for the fed do that is make the economy stronger and the best way to make it stronger is through lower rates. just one other thing. he is addressing this issue that has been percolating in congress, the idea of giving the gao the ability to audit the fed's monetary policy and audit as much as you want but don't audit monetary policy because it could politicize the making of monetary policy. >> the bottom line is the market can certainly take comfort and i gather it is today knowing that the fed, not that it needs to get it today, already knows the fed will remain stimulus for quite some time and we should let folks know the reason why you're in chicago, those certainly comments were echoed
12:33 pm
by charlie evans. >> i thought charlie added information when we got to ask him what he thinks happened next year. there is an open question in the statement. what happens after operation twist ends and charlie evans saying that he thinks they ought to maintain it or keep adding $85 billion to the balance every month and this is not through a twist context. he doesn't want them to shell short-term and buy long-term, he wants them to bias sets of 85 billion. he is out there saying i think it should be 2013 and a solid reaction in the gold market and also i think the stock, too, scott. >> yep. no doubt about that. steve liesman, thanks so much. >> i am sorry, one thing. i just want to add we'll be monitoring, he will be taking questions and we'll be monitoring and taking some of that live even. >> we absolutely will if it
12:34 pm
falls within the con finds of our show, will you see it here. if not our friends at power lunch will bring you that chairman and answer session. steve grasso, give me the view on the floor of the exchange. mr. bernanke, mr. evans and other that is like the stimulus are your friend, right? >> you tell me where the central bank that's not printing money and i will give you a lollipop and i know that's what you're in the business for. for me i stayed invested in the gold miners. if you look around the globe, it is all you see. there is some predictability but we're in ab election year cycle and a lot of the unknown is out of the chairman's hands. >> there was a time going to the dentist, the only pay off was a lollipop at the end. >> it keeps you coming. >> we have much more to come coming back live from the investing congress and we'll sit down with whitney till son, the
12:35 pm
host of the great event and we'll talk about his investment pick and his highly conversational and provocative comments regarding netflix and apple zone. we'll follow and have more trades ahead on halftime. nces. [ jack ] hey, who's boring now? [ male announcer ] get more access with the citi card. [ crowd cheering, mouse clicks ] ♪ [ male announcer ] the first look...is only the beginning. ♪ ♪ introducing a stunning work of technology.
12:36 pm
♪ introducing the entirely new lexus es. and the first ever es hybrid. this is the pursuit of perfection. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.
12:37 pm
12:38 pm
does netflix have a better business model than amazon? that's what investor whitney tillson told this conference today. he joins us now with more picks. good to see you hear. congratulations on another great event. have you 400 or so folks here and ackman and einhorn and you are the one that made big comments today. netflix has a better business than amazon. did you have too much coffee this morning? >> it was rel a comparison of amazon ten years ago, what did it look like when it was the same size as netflix? it turned out in 2001 amazon's revenues, market cap, number of customers were virtually identical to netflix in 2011. two companies ten years apart and very similar and my point is that's the kind of upside
12:39 pm
netflix has if it executes well and i see both as global businesses and by the way amazon has been a 20 bagger since then and i point out netflix has a lighter business model. they don't have to deliver products and build warehouses and so forth. it is inherently a higher margin business, lighter business model. there is a lot of execution risk. i was pointing out one high upside scenario is it could be this decade's amazon. >> why do you remain so confident in that name in the face that you yourself mentioned and so, too, do so many of the others on the bearish side and the interest is huge. >> i know. it is probably the most controversial thing in my portfolio. my portfolio is anchor the by something like berkshire hathaway and it is go you can size up. it has a wide range of outcomes, 3 to 4% position and i like situations where my down i'd is protected by eventually i could think of a half dozen to a dozen
12:40 pm
company that is would love to own netflix is how i think about that valuation on the downside and on the upside it could be an amazon. >> i will open it up to the traders in a moment. your conviction on this one is strong given the fact your firm has undergone changes and you bought it back. >> yes. >> you really believe in this story. >> yes. it is now i only own 10 or 12 positions on the long side now and this is one of the ones i bought back sort of highest conviction but understanding it is high risk and high volatility and has to be sized appropriately. >> stephanie, what do you think about this one and also whitney bought back citi and goldman as we well. >> can we shift in it was downgraded today. i know a lot was valuation, but i guess my biggest concern is can they sell down their
12:41 pm
holdings assets fast enough without losing another 66 billion? do you think that's in the stock at this point? how do you see that playing out? >> well, citi holdings is basically citigroup for background for folks split into good bank, bad bank, and citi holdings is sort of bad bank they're winding down and we watch it closely every quarter and they have really done a superb job and every quarter that goes by that there are no unexpected surprises and they provide a lot of disclosure into the mortgages underlying and you can see the 30, 60 day did i fault trends, et cetera, and i am pretty comfortable there is not some big black bomb that comes in and over turns the apple cart here for citigroup and so up 50 bucks a share so still cheap in my opinion. >> you were one of the most vocal supporters of john johnson and you're no longer in the name. steve weiss is sitting over here
12:42 pm
with a small ego but he is probably going to think that he finally convinced you this was not the one to go along on. >> yes. >> why did you get out and why did you stay out? >> as part of the transition in my business we sold town down all the liquid stuff and i had to decide what to buy back and j.c. penny was a hard one. i still like ron johnson and i believe in the long-term turn around but the short-term is much i don't carier than ron and even the board would say it has been. right now i would love to get enough conviction to buy it back. i just want to see another quarter or two of earnings and see that things are starting to burn before i get back in. >> it will be interesting to see. bill ackman is speaking at 5:00 today, big position, noted position in jcpenney, what certainly he may have to say about that one. >> first of all, whitney, since you're the host today i want to try to be as helpful as i was.
12:43 pm
on netflix i don't see it the same way. i love aig but netflix, the difference between them and amazon is that amazon has the bricks and mortars they already spent money on putting in the ground where as netflix costs keep going up and the head of time warner about a year ago said specifically netflix you're not going to get it as cheap as you used to and you have so many competing carriers of content versus amazon where the content comes off for free because you want all of this there. i just don't see it the same. i see netflix on the way down although i am not sure coming here but i don't really -- i see the risk. i don't see the reward there. >> it is easy to say. it is really think about the analogy i was making, the amazon ten years ago, the stock had gone from 400 to 12 and they were competing against walmart, et cetera, and they were competing in big box companies
12:44 pm
and losing money like crazy which netflix is not and they had a net debt position and netflix has a net cash position. it is not a perfect analogy. i see a very entrepreneurial company using technology to take an old product and deliver it in a new way to customers with a high value proposition. it only costs 26 cents a day for subscribers and there is very high customer satisfaction and there is a real global growth opportunity, the kind of global growth opportunity amazon had ten years ago and still to some extent have and so netflix could get on that kind of curve. i am not saying i think it is likely. if there is a 10% chance of a ten bagger -- >> pretty interesting. >> you're actually viewing this right now when you're comparing it to amazon and this could be a ten bagger. you talked about amazon being a
12:45 pm
20 bagger. do you see that as the international growth, the cost of con at the particular time coming down because they moved in the tv series? >> i agree with steve's point, the cost of content will probably rise overtime. as reed hastings said, the content providers want to charge me as much as they can. to get the content i only pay one dollar more than the next bitter. who is the next bidder here? is it hulu with less than 10% of subscribers of netflix? amazon seems willing to spend money but how much money are they really going to be willing to spend given they're not charging anything for it? >> they show advertisers spend everything because you keem saying earnings out and the other competitors are the cable companies that you're already paying for your cable so you get it free. i get hbo on go for free. >> yep. it is something. there are a lot of competitors looking at this market. what i am watching is looking
12:46 pm
for anybody getting real traction because there is lots of talk and there is no real evidence that any competitor is out there getting traction at this point. >> what i like to do, can you give me your quick overall view of the stock market given where we have come this year? >> sure. i think the u.s. economy is having a step i had economic recovery. gdp is positive creating jobs every month and not really enough to -- not the kind of strong economy everyone wants but we're sort of mulgding along. i expect that to continue for a while. the stock market seems to have gotten ahead of in the tense the s&p is up 16, 17% already this year and in the bottoms up research i am finding five to ten interesting short ideas to look at and do research on for every interesting long idea. that to many extent tells me it is i much more interesting for a hedge fund that does shorting. >> the interesting thing is a
12:47 pm
good number of hedge funds under performs. the market, you will be hearing from the best and brightest names in that try and we'll sternl r certainly bait out their wau. >> the value ip .ing gres skpn with we continue to monitor the comment from ben bernanke and wave on the kwa session that you will see love and lots more straight ahead from the heart of new york city and tomorrow a trading summit taking a closer look at one of the biggest issues facing investors today and that's high speed trading and offering most importantly potential solutions and our guests include mark cuban and joe saluzzi and sean hendelman all tomorrow on cnbc. [ male announcer ] the 2013 smart comes with 8 airbags,
12:48 pm
a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
12:49 pm
12:50 pm
with the blackish-blue frame and the white dots and the splattered paint pattern, your lights are on. what? [ male announcer ] the endlessly customizable 2013 smart.
12:51 pm
frmplts the glass enclonesed nerve center of cnbc, today fed chairman ben bernanke is speaking now out of indianapolis. he's going to answer questions on the impact of qe3. he is offering a full tloetd defense of his policies. we're going to bring it all to you live. markets in rally mode. but can you trust them? we're going to look at where opportunity may lie in the faurt quart fourth quarter. and inside facebook. inside the strategic changes the company has made internally since that troubled ipo. i'll see you at the top of the hour. now back to more "fast half." look forward to seeing the fed chairman. pops and drops. biggest movers in midday trading. sprint is dropping 3%. >> talk about a turnaround
12:52 pm
story. this one i've been in for a while. i trimmed around the $5 area. still long 20% of the position. when you talk about returning to profitability in the next couple years that gets investors excited. it used to be about m and armt. now it is just about returning to profitability. i'll still in the trade. >> citigroup did get a downgrade today. nevertheless the stock is higher by 2% -- actually now 1%. >> it's pulling back a little bit. it is all about valuation. they talk about the stock at $33. i still like the stock. i think it goes a lot higher. >> allscripts health care. >> they were considering buying themselves out last week. you had a few firms upgrade today. they didn't like it at $10 or $11. now $13 they like it. i think it should be acquired but that's no reason to buy a stock. >> over to you, steph, transocean getting a pop today. >> the brazil supreme court partially suspended the injunction. not a big surprise. if you want deep water, ensco is
12:53 pm
way cheaper around the one to buy. will facebook rebound from its face plant in the fourth quarter? plus fed chief ben bernanke getting ready to take questions. we'll take you there live when he does. ♪ chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save.
12:54 pm
zagat just gave hertz its top rating in 15 categories, including best overall car rental. so elevate your next car rental experience with the best.
12:55 pm
12:56 pm
welcome back on "halftime." so much for that gain in the nasdaq. we've given it almost all back now. you can look at one stock primarily for the reason why. that being microsoft today, downgraded over at rbc. that stock down .66%. back in a moment. a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety.
12:57 pm
12:58 pm
try this... bayer? this isn't just a headache. trust me, this is new bayer migraine. [ male announcer ] it's the power of aspirin plus more in a triple action formula to relieve your tough migraines. new bayer migraine formula.
12:59 pm
[ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪ welcome back. time for final trade. stephanie link, take us off. >> buying coke. stock's trading at a significant discount to its peers. like the long. term story. >> wynn resorts. my risk trade. i'm long it. >> ge. it is going to go a lot higher. >> steve. >> long apple. it is a good opportunity to go
left
right

5 Views

disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on